Patience key to building thriving business in China

PHOTO: The Straits Times

Patience is the key ingredient that has allowed rag trade boss Dorothy Seet to survive - and thrive - in China for over 21 years while being away from her family in Singapore.

Ms Seet, 63, has found that whatever the task at hand - negotiating a business deal, managing staff or resolving disputes - staying composed and taking pains to understand the background and motivations of the people involved pays off.

It has proved a highly useful approach in running her clothes- making business in China, but she still needs to get herself up when tackling the very different culture in the country.

"I just have to talk myself into accepting that it takes a lot of patience to understand the people that I work with, and this is part and parcel of the culture there."

Fortunately, she has an eye for detail, something that has helped her adapt to the ways and mores of the locals. That often meant keenly observing the behaviour of others and adjusting her own behaviour accordingly.

Those personality traits, combined with a determination to ensure the survival of the family business, helped Ms Seet turn the once problem-fraught Beijing Smart Garments (BSG) into a thriving business. At one point, it had four factories and employed 2,900 workers.

A life-changing career move by accident

The firm was set up by Ms Seet's in-laws in 1985 as a joint venture with the Shunyi county government in Beijing, focusing on menswear, such as suits.

It was managed for many years by the Chinese, but in 1997, the family learnt that the general manager had started a similar business on the side and was siphoning customer orders and staff out of the company.

Ms Seet was already in Beijing, arriving in 1994 to set up a women's line for BSG.

The family decided that she was the best person to take over the Beijing operations, and she was made the general manager in 1998. "Contrary to what some people may think, you cannot just go, set up, operate, come back and remote control the business from here," says Ms Seet in an interview with The Strait Times during one of her recent trips back to Singapore.

"It was a big operation and there were many people to take care of. It requires full devotion."

To give it her full attention, she left her two young daughters behind in Singapore under the care of her husband, and moved to China on her own.

She has never looked back, and 21 years on, she is still based in Beijing, shuttling to and from Singapore once every one or two months.

Conflicting demands of family and business

"It has always been a big headache for me," says Ms Seet, referring to how tough it had been for her in the early days.

When she first took over the helm of the company, it was losing money, workers were leaving and debtors were chasing payments, yet her younger daughter was barely five.

"I spent a lot of time on the phone, calling home to make sure things were okay," she recalls. Things did not get any easier when her two daughters eventually went to study in Australia. Ms Seet then had to divide her time between three places.

Flying home to see her family could put her on an emotional roller-coaster in the early days.

There were only two Singapore Airlines flights a week from Beijing to Singapore back then. "If I missed a flight, I'd be crying about not being able to make it home."

Strategy change

Ms Seet's family had initially chosen Beijing as a base, over the huge manufacturing areas of southern China, as their deal with the Shunyi county government allowed them to sell 30 per cent of their products in the domestic market.

This foresight has made it easier for BSG to switch from export-oriented production to a greater emphasis on the Chinese consumers.

Ms Seet notes that demand for clothing in BSG's main markets, like the United States, Europe and Japan, has not picked up since the financial crisis in 2008.

Export sales used to be 70 per cent of the company's revenue, but now domestic sales are valued at around 300 million yuan (S$67 million) a year, with exports totalling 200 million yuan.

BSG sells through its chain of around 90 shops across China.

The high cost of operations, including increasing wages, prompted Ms Seet to downsize manufacturing to just one factory with around 600 workers and turn instead to sub-contractors.

While Ms Seet had plans to list BSG several years ago, having the government as a partner made it quite difficult.

In the beginning, the joint-venture arrangement was an asset, she says, but as the company grew, and as she came to understand the issues and conditions better, the joint-venture partners became more of a hindrance than a help.

"Some years ago, we wanted to move the factory to Hebei (away from Beijing) to enjoy lower operational costs. The partners refused as that meant moving the tax revenues away from them," she recalls.

Although government officials are now barred from direct involvement in the business, the old ways still continue.

"They continue to plant their own people in the company, who will take orders from them," Ms Seet says.

Her personal priority has also changed. The plan for now is to find a successor for the business or sell it within the next five years.

"I'd like to ensure that the business continues, but we need someone who can function effectively and is honest."

Doing business in China

Over the past 30 years, BSG has grown from a "foreign" brand, to one that is considered a home-grown one among its middle-aged Chinese customers.

"We started in the beginning of the reform and opening up. There was a limited supply of clothing options then, so the people used to have to wear our suits," says Ms Seet.

BSG is known as "Shun Mei", which means smooth and beautiful, an auspicious-sounding name to the Chinese. So, it is also a go-to brand when the Chinese men are looking for new suits for occasions like weddings.

"The sound of the brand makes a difference here, so it's really important to understand the Chinese culture and mentality," notes Ms Seet.

Unlike Japan, China is not a homogenous market; there are great differences between provinces, and even between districts.

Ms Seet says the demand across the shops is "quite different" and buying habits vary depending on the local characteristics.

In the course of her 21 years in China, she has come across many businesses, Singapore-owned or otherwise, that fail because they do not understand the Chinese culture enough.

It is important to get connected, or tap a platform to build relationships. This is where Singaporean businessmen can consider making use of the Singapore Chamber of Commerce and Industry in China's (SingCham) network.

"You have to understand, within your line of business, who are the people that you want to know, and how can you go about getting to know them," she says.

"After you know them, you have to figure out how to build a friendship. There's a whole set of techniques surrounding this."

However, Ms Seet still thinks China is an "immensely interesting but yet frustrating" place.

China "being such a huge place, somewhere, somehow, there'll be a place for you".

kohping@sph.com.sg

This article was first published on August 8, 2015. Get a copy of The Straits Times or go to straitstimes.com for more stories.